PROSEGUR COMPAÑIA DE SEGURIDAD, S.A. AND SUBSIDIARIES. Summary of consolidated interim financial statements for six-month period ended on 30 June 2016

Transcription

1 PROSEGUR COMPAÑIA DE SEGURIDAD, S.A. AND SUBSIDIARIES Summary of consolidated interim financial statements for six-month period ended on 30 June 2016 (Translation from the original in Spanish. In the event of discrepancy, the Spanish language version prevails)

2 Table of Contents I. CONSOLIDATED PROFIT AND LOSS ACCOUNT COSTS BY FUNCTION 4 II. CONSOLIDATED COMPREHENSIVE PROFIT AND LOSS STATEMENT 5 III. CONSOLIDATED FINANCIAL STATEMENT 6 IV. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 7 V. CONSOLIDATED CASH FLOW STATEMENT 9 The notes included on pages 10 to 43 form an integral part of this summary of consolidated interim financial statements 9 VI. EXPLANATORY NOTES TO THE SUMMARY OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS General Information Conditions for submission, estimates made and accountancy policies Changes in the composition of the Group Events that have taken place since year end Revenue Cost of sales and selling, general and administrative expenses Employee benefits expense Other expenses Net financial expenses Segment reporting Property, plant and equipment, goodwill and other intangible assets Property, plant and equipment Investment property Goodwill Other intangible assets Financial assets Investments accounted for using the equity method Joint arrangements Cash and cash equivalents Inventory Equity Share Capital Share premium Treasury stock Dividends Earnings per share 27 2

3 Table of Contents 17. Provisions Suppliers Financial Liabilities Taxation matters Contingencies Business combinations Goodwill included in Goodwill included in 2015 and not revised in Related Party Transactions Average staff Events after the reporting date 43 Appendix I 44 3

4 I. CONSOLIDATED PROFIT AND LOSS ACCOUNT COSTS BY FUNCTION (In thousands of euros) Six-month period ended on 30 June Note Revenue 5 1,837,119 1,952,576 Costs to sell 6, 7 (1,410,569) (1,509,135) Gross profit 426, ,441 Other income 1,003 11,954 Sale and administrative expenses 6, 7 (270,301) (297,093) Other expenses 8 (7,550) (14,876) Investment accounted for using the equity method 13 (1,472) (721) Operating profit/loss (EBIT) 148, ,705 Finance income ,069 Finance expenses 9 (22,526) (26,196) Net financial expenses 9 (22,470) (23,127) Profit before tax 125, ,578 Income tax 20 (45,049) (42,600) Post-tax profit from continuing operations 80,711 76,978 Profit/(loss) for the year from interrupted operations - - Consolidated profit for the period 80,711 76,978 Attributable to: Owners of the parent 80,717 77,556 Non-controlling interests (6) (578) Earnings per share from continuing operations attributable to the owners of the parent (Euros per share) - Basic Diluted Earnings per share from interrupted operations attributable to the owners of the parent (Euros per share) - Basic Diluted - - The notes included on pages 10 to 43 form an integral part of this summary of consolidated interim financial statements 4

5 II. CONSOLIDATED COMPREHENSIVE PROFIT AND LOSS STATEMENT (In thousands of euros) Six-month period ended on 30 June Profit/loss for the period 80,711 76,978 Other comprehensive income: Items which are reclassified to profit and loss Translation differences of financial statements of foreign operations 18,491 (21,334) Total comprehensive income for the period, net of tax 99,202 55,644 Attributable to: - Owners of the parent 99,156 55,322 - Non-controlling interests ,202 55,644 The notes included on pages 10 to 43 form an integral part of this summary of consolidated interim financial statements 5

6 III. CONSOLIDATED FINANCIAL STATEMENT (In thousands of euros) ASSETS Note 30 June December 2015 Property, plant and equipment , ,101 Goodwill , ,151 Other intangible assets , ,972 Investment property 11 70,935 83,678 Investments accounted for using the equity method 13 38,259 18,328 Non-current financial assets 12 7,505 8,324 Deferred tax assets 171, ,959 Non-current assets 1,552,026 1,481,513 Inventory 15 86,103 69,695 Trade and other receivables 909, ,312 Current tax asset 65,556 68,001 Non-current assets held for sale Other financial assets 12 2, Cash and cash equivalents , ,434 Current assets 1,323,951 1,293,629 Total assets 2,875,977 2,775,142 EQUITY Share capital 16 37,027 37,027 Share premium 16 25,472 25,472 Treasury stock 16 (53,315) (53,493) Translation differences (496,078) (514,517) Accumulated earnings and other reserves 1,219,014 1,205,467 Equity attributable to equity holders of the Parent 732, ,956 Non-controlling interests 483 (330) Total equity 732, ,626 LIABILITIES Financial Liabilities , ,291 Deferred tax liabilities 112, ,838 Provisions , ,440 Non-current liabilities 912, ,569 Trade and other payables 756, ,677 Current tax liabilities 49,821 82,725 Financial Liabilities , ,249 Provisions 17 7,011 8,133 Other current liabilities 41,190 41,163 Current liabilities 1,230,985 1,162,947 Total liabilities 2,143,374 2,075,516 Total equity and liabilities 2,875,977 2,775,142 The notes included on pages 10 to 43 form an integral part of this summary of consolidated interim financial statements 6

7 IV. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY PERIOD ENDED ON 30 JUNE 2016 (In thousands of euros) Equity attributable to equity holders of the Parent Capital (Note 16) Share premium (Note 16) Own shares (Note 16) Translation differences Accumulated earnings and other reserves Total Minority interests Total equity Saldo a 1 de enero de ,027 25,472 (53,493) (514,517) 1,205, ,956 (330) 699,626 Total comprehensive income for the period ended 30 June ,439 80,717 99, ,202 Dividends for (68,189) (68,189) - (68,189) Other movements ,019 1, ,964 Saldo a 30 de junio de ,027 25,472 (53,315) (496,078) 1,219, , ,603 The notes included on pages 10 to 43 form an integral part of this summary of consolidated interim financial statements 7

8 PERIOD ENDED ON 30 JUNE 2015 (In thousands of euros) Equity attributable to equity holders of the Parent Capital (Note 16) Share premium (Note 16) Own shares (Note 16) Other own equity instruments Translation differences Accumulated earnings and other reserves Total Minority interests Total equity Saldo a 1 de enero de ,027 25,472 (53,493) 3,401 (245,156) 1,085, ,653 11, ,061 Total comprehensive income for the period ended 30 June (22,234) 77,556 55, ,644 Dividends for (65,947) (65,947) - (65,947) Other movements (3,401) - 1,028 (2,373) (11,586) (13,959) Saldo a 30 de junio de ,027 25,472 (53,493) - (267,390) 1,098, , ,799 The notes included on pages 10 to 43 form an integral part of this summary of consolidated interim financial statements 8

9 V. CONSOLIDATED CASH FLOW STATEMENT (In thousands of euros) Note Cash flows from operating activities Profit/loss for the period 80,711 76,978 Adjustments for: Depreciation and amortisation 6, 11 55,104 64,110 Impairment losses on non-current assets ,656 Impairment losses on trade receivables and stock 8, 15 6,784 5,037 Impairment losses on other financial assets 9-3,027 Investments accounted for using the equity method 13 1, Other revenues and expenses - (11,113) Change in provisions 17 21,320 32,211 Finance income 9 (56) (3,069) Finance expenses 9 22,526 23,169 Gains/losses on derecognition and sale of property, plant and equipment Income tax 20 45,049 42,600 Changes in working capital, net of the effect of acquisitions and translation differences Six-month period ended on 30 June Inventory (20,477) (15,042) Trade and other receivables (78,672) (57,495) Trade and other payables 20,815 31,030 Payment of provisions (13,350) (40,962) Other liabilities (985) (4,670) Cash from operating activities Interest paid (20,274) (19,338) Income tax paid (52,056) (72,904) Net cash from operating activities 68,572 64,699 Cash flows from investing activities Proceeds from sale of property, plant and equipment - Proceeds from sale of financial assets 829 8,009 Interest collection Acquisition of subsidiaries, net of cash and cash equivalents 22 (3,069) (2,280) Acquisition of property, plant and equipment 11.1 (56,188) (52,027) Acquisition of intangible assets 11.4 (5,136) (6,769) Acquisition of investment property (38,245) Acquisition of joint ventures, net of cash and cash equivalents 13 (19,890) - Acquisition of financial assets (1,366) (118) Net cash from investing activities (84,764) (91,316) Cash flows from financing activities Proceeds from loans and borrowings 78,149 76,346 Payments for loans and borrowings (43,214) (34,626) Payments for other financial liabilities (35,325) (21,387) Dividends paid 16.4 (31,955) (31,950) Net cash from financing activities (32,345) (11,617) Net increase (decrease) in cash and cash equivalents (48,537) (38,234) Cash and cash equivalents at the beginning of period 316, ,056 Effect of exchange differences (7,239) 1,868 Cash and cash equivalents at the end of the period 260, ,690 The notes included on pages 10 to 43 form an integral part of this summary of consolidated interim financial statements 9

10 VI. EXPLANATORY NOTES TO THE SUMMARY OF CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. General Information Prosegur is a business group comprised of Prosegur Compañía de Seguridad, S.A. (hereinafter the Company) and its subsidiaries (boards, Prosegur) that provides private security services in the following countries: Spain, Portugal, France, Luxemburgo, Germany, Argentina, Brazil, Chile, Peru, Uruguay, Paraguay, Mexico, Colombia, Singapore, India, China, South Africa, Lesotho, Namibia, Nigeria and Australia. Prosegur is organised into the following geographical areas: - Europa & ROW, substituting the previous geographical area Europe & Asia-Pacific as a consequence of Africa being included. - Latin America (LatAm), The services rendered by Prosegur are classed into the following activity lines: - Integrated Security Solutionss (ISS), - Cash in transit (CIT) and cash management, - Alarms. Prosegur is controlled by Gubel S.L., a company incorporated in Madrid, holding % of the shares in Prosegur Compañía de Seguridad, S.A., which consolidates Prosegur's financial statements. Prosegur Compañía de Seguridad, S.A. is a public limited company, with shares listed on the Madrid and Barcelona Stock Exchanges and traded through the Spanish Stock Exchange Interconnection System (electronic trading system) (SIBE). The Company was incorporated in Madrid on 14 May 1976 and is registered on the Madrid Trade Register. Prosegur Compañía de Seguridad, S.A. has its registered business address in Madrid, at Calle Pajaritos, no. 24. Its corporate purpose is described in article 2 of its company by-laws. The main purpose of the Company is to provide the following services and activities using its subsidiary companies: - The surveillance and protection of establishments, assets and people. - The transport, deposit, safekeeping, counting and classification of currency and notes, bonds, securities and other objects that, due to their economic value or their danger, may require special protection. - The installation and maintenance of security apparatuses, devices and systems. The consolidated and individual annual accounts of Prosegur Compañía de Seguridad, S.A. for financial year 2015 were approved by the General Shareholders Meeting held on 27 April

11 Structure of Prosegur Prosegur Compañía de Seguridad, S.A. is the parent company of a group formed of subsidiary companies, listed in Appendix I to the Notes to the consolidated annual accounts as of 31 December Likewise, Prosegur holds Joint Agreements (Note 15, Note 16 and Appendix II to the Notes to the consolidated annual accounts as of 31 December 2015). Prosegur also holds shares of under 20% of the share capital of other companies, over which it does not exert any significant influence (Note 17 to the consolidated annual accounts as of 31 December 2015). Details of the principles applied for drawing up the Prosegur consolidated annual accounts and defining the consolidated group are provided in Note 35.2 and Note 2 to the consolidated annual accounts as of 31 December Conditions for submission, estimates made and accountancy policies This summary of Prosegur's consolidated interim financial statements, for the six-month period ended on 30 June 2016, were drawn up in accordance with IAS 34 Interim financial reporting. In accordance with the provisions of IAS 34, interim financial reports are drawn up with the sole intention of updating the content of the latest annual accounts drawn up by Prosegur, with emphasis on new activities, events and circumstances that have occurred during the six-month period ended on 30 June 2016, and not duplicating the information published previously in the consolidated annual accounts for financial year Due to the above, and for appropriate understanding of the information included in this summary of consolidated interim financial statemetns, it must be read jointly with Prosegur's consolidated annual accounts for the financial year ended on 31 December 2015, which were drawn up in accordance with International Financial Reporting Standards, adopted for use in the European Union and approved by current European Council Regulations and other provisions in applicable financial reporting standards (IFRS_EU). The estimates, made depending on the best available information, are the same as those indicated in the Notes to the consolidated annual accounts for financial year During the six-month period ended on 30 June 2016, there were no significant changes to the estimates made at year end Except for Appendix I, the accountancy policies applied for this summary of consolidated interim financial statements on 30 June 2016 are the same as those applied for drawing up Prosegur's consolidated annual accounts on 31 December 2015, details of which are included in Note 35 of those consolidated annual accounts. Corporate Tax for the six-month period ended on 30 June 2016 is calculated using the tax rate which is expected to be applicable to profits for the financial year. 11

12 Comparative information Each of the entries on the consolidated financial statement, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes in equity and the notes to the summary of interim financial statements include comparative figures for the previous year, apart from the figures for the six-month period ended on 30 June 2016,excep the consolidated statement of financial position that includes the figures corresponding to the twelve nont period ending 31 December Changes in the composition of the Group Appendix I to the consolidated annual accounts for the financial year ended on 31 December 2015 provides relevant information regarding the Group companies that were consolidated on that date. During the first six months of financial year 2016, the following merger took place between Prosegur subsidiaries: In May 2016, Prosegur Securite Nord SAS merged with and into Prosegur Securite Humaine SAS in France. In May 2016, Prosegur Securite Est SAS merged with and into Prosegur Securite Humaine SAS in France. Furthermore, the following companies were incorporated during the first six months of 2016: In January 2016, Prosegur incorporated a joint venture in India for the activity of alarms, under the name SIS Prosegur Alarms Monitoring and Response Services Pte Ltd. In February 2016, Prosegur Ciberseguridad S.A.S. was incorporated in Colombia. In February 2016, Prosegur CIT Holding S.L.U. was incorporated in Spain. In March 2016, Prosegur Holding CIT ARG S.A., Prosegur Sistemas Integrales de Seguridad S.A. and Prosegur Seguridad y Vigilancia, S.A. were incorporated in Argentina. In May 2016, Beagle Control (Pty) Ltd was incorporated in South Africa. In June 2016, Beagle Technical (Pty) Ltd was incorporated in South Africa. In June 2016, Prosegur Services France S.A.S. was incorporated in France. In June 2016, Prosegur Ciberseguridad S.L. was incorporated in Spain. 4. Events that have taken place since year end Further to the content of Note 3 regarding changes in the composition of the Group, the most relevant events and transactions that took place during the first six months of 2016 are listed below: 12

13 Through various funds managed by FMC LLC, in January 2016, the company's shareholdings reached a total of 18,755,993 shares, equivalent to over 3% of Prosegur's shareholding structure. 5. Revenue The list of revenue for the periods ended on 30 June 2016 and 2015 is as follows: Period ended 30 June Provision of services 1,759,150 1,871,673 Goods sold 7,681 4,954 Operating lease revenues 70,288 75,949 Total revenues 1,837,119 1,952,576 Operating lease revenues contains revenues from alarm system rentals. See Note 10 for further information on revenues by segment and geographical area. 6. Cost of sales and selling, general and administrative expenses The main expense items under the headings of costs to sell and sale and administrative expenses on the profit and loss account for the six-month periods ended on 30 June 2016 and 2015 are listed below: Period ended 30 June Supplies 83,412 74,943 Employee benefits expense (Nota 7) 1,127,775 1,198,261 Operating leases 22,568 25,040 Supplies and external services 102, ,537 Depreciation and amortisation 25,194 28,651 Other expenses 49,179 72,703 Total costs to sell 1,410,569 1,509,135 Supplies 1,892 1,907 Employee benefits expense (Nota 7) 136, ,628 Operating leases 19,100 19,864 Supplies and external services 52,771 55,443 Depreciation and amortisation 29,910 35,459 Other expenses 30,407 35,792 Total sale and administrative expenses 270, ,093 Total supplies in the consolidated income statement for the six-month period ended on 30 June 2016 amount to EUR 85,304 thousand (2015: EUR 76,850 thousand). 13

14 7. Employee benefits expense Details of employee benefits costs for the six-month periods ended on 30 June 2016 and 2015 are as follows: Period ended 30 June Salaries and wages 933,069 1,031,196 Social Security 245, ,804 Other employee benefits expenses 58,005 27,175 Termination payments 27,715 27,714 Total employee benefits expense 1,263,996 1,346,889 Note to Prosegur's consolidated annual accounts on 31 December 2015 states that the 2014 Plan, which is connected to the creation of value during the period from 2012 to 2014, was approved at the General Shareholder's Meeting held on 29 May At the General Meeting held on 28 April 2015, the shareholders approved the 2017 Plan of long-term incentives for the Managing Director and Senior Management of Prosegur. The 2017 Plan is essentially linked to value creation during the period and sets out the payment of incentives pegged to the listed value of shares and/or cash incentives to the Managing Director and Senior Management of the Company like the previous plan. In relation to the 2014 and 2017 long-term incentive plan for the CEO and Senior Management of Prosegur, expense accrued during the first six months of 2016, amounting to EUR 2,130 thousand has been included in Salaries and wages (on 30 June 2015: EUR 1,950 thousand) (Note 17). 8. Other expenses Details of other expenditure on the income statement for the six-month periods ended on 30 June 2016 and 2015 are as follows: Period ended 30 June Impairment losses on trade receivables (6,161) (4,467) Impairment losses on non-current assets (Note 11.1) (103) (9,656) Net gains/losses on disposal of fixed assets (558) (753) Other expenses (728) - Total other expenses (7,550) (14,876) 14

15 9. Net financial expenses The net financial costs for the six-month periods ended on 30 June 2016 and 2015 are broken down as follows: Period ended 30 June Interest paid (13,888) (14,964) Interest received Dividends received - 5 Net gains/losses on foreign currency transactions (4,116) 2,955 Financial cost of leasing transactions (975) (990) Impairment losses/profit from investments in equity instruments - (3,027) Other net financial income and costs (3,547) (7,215) Total net financial expenses (22,470) (23,127) During the first six months of 2015, there was a loss of EUR 3,027 thousand due to impairment in the fair value of available-for-sale financial assets. 10. Segment reporting The Board of Directors is the highest operational decision-making body in Prosegur and, along with the Audit Committee, it reviews the internal financial information of Prosegur in order to assess performance and allocate resources. The Board of Directors analyses business at parent level on two fronts: by geographical area and by activity. From a geographical perspective, two segments are identified: Europa & ROW and Latin America (LATAM), which, in turn, includes the activity segments identified as Integrated Security Solutions (SIS), Cash in Transit (CIT) and Alarms. The Board of Directors uses earnings before interest and taxes (EBIT) to assess segment performance, since this indicator is considered to best reflect the results of the Group s different activities. Total assets allocated to segments do not include other current and non-current financial assets, investment property, or cash and cash equivalents, as these are managed at Prosegur Group level. Total liabilities allocated to segments do not include or loans and borrowings, except for finance lease payables, as financing is managed at Prosegur Group level. 15

16 Details of revenue by segments for the six-month periods ended on 30 June 2016 and 2015 are as follows: Europe & ROW LatAm Total on 30 June 2015 on 30 June 2016 on 30 June 2015 on 30 June 2016 on 30 June 2016 on 30 June 2015 Integrated Security Solutions 486, , , , , ,815 % of total 60% 60% 44% 44% 51% 50% CIT and cash management 266, , , , , ,275 % of total 33% 33% 52% 52% 43% 45% Alarms 63,006 53,484 42,617 50, , ,486 % of total 7% 7% 4% 4% 6% 5% Total sales 815, ,145 1,021,687 1,173,431 1,837,119 1,952,576 Details of EBITDA and EBIT by segment are as follows: Europe & ROW LatAm Total Sales to external customers 815, ,145 1,021,687 1,173,431 1,837,119 1,952,576 Other net expenses (765,927) (727,355) (866,386) (1,014,968) (1,632,313) (1,742,323) Losses from investment accounted (1,472) (721) - - (1,472) (721) EBITDA 48,033 51, , , , ,532 Depreciation and amortisation (23,018) (25,146) (32,086) (38,964) (55,104) (64,110) Impairment losses - (2,717) (2,717) EBIT 25,015 23, , , , ,705 A reconciliation of EBIT allocated to segments with net profit for the year attributable to the owners of the parent is as follows: on 30 June 2016 on 30 June 2015 EBIT allocated to segments 148, ,705 Net financial expenses (22,470) (23,127) Profit before tax 125, ,578 Income tax (45,049) (42,600) Post-tax profit from continuing operations 80,711 76,978 Non-controlling interests (6) (578) Profit for the period attributable to owners of the parent 80,717 77,556 Details of the assets allocated to segments and conciliation with total assets as of 30 June 2016 and as of 31 December 2015 are as follows: on 30 June 2016 Europe & ROW on 31 December 2015 on 30 June 2016 on 31 December 2015 on 30 June 2016 on 31 December 2015 on 30 June 2016 on 31 December 2015 Assets allocated to segments 968, ,180 1,566,486 1,445, ,534,774 2,365,967 Other unallocated assets , , , ,175 Other non-current financial assets ,505 8,324 7,505 8,324 Investment property ,935 83,678 70,935 83,678 Other current financial assets , , Cash and cash equivalents , , , , , ,180 1,566,486 1,445, , ,175 2,875,977 2,775,142 LatAm Not allocated to segments Total 16

17 Details of the liabilities allocated to segments and conciliation with total liabilities as of 30 June 2016 and as of 31 December 2015 are as follows: on 30 June 2016 Europe & ROW on 31 December 2015 on 30 June 2016 on 31 December 2015 on 30 June 2016 on 31 December 2015 on 30 June 2016 on 31 December 2015 Liabilities allocated to segments 540, , , , ,229,654 1,199,039 Other unallocated liabilities , , , ,477 Loans and borrowings , , , , , , , , , ,477 2,143,374 2,075,516 LatAm Not allocated to segments Total The geographical distribution of revenues and non-current assets is as follows: on 30 June 2016 Revenue Argentina area is composed for Argentina, Paraguay y Uruguay on 30 June 2015 Non-current assets allocated to segments on 30 June 2016 on 31 December 2015 Parent company country (Spain) 460, , , ,037 Brazil 397, , , ,264 Argentina area 396, , , ,437 Other countries 582, , , ,773 1,837,119 1,952,576 1,473,586 1,389,511 17

18 11. Property, plant and equipment, goodwill and other intangible assets Property, plant and equipment Details of movements of property, plant and material for the six-month periods ended on 30 June 2016 and 2015 are as follows: Period ended 30 June Cost Balance at the start of the period 965,303 1,006,964 Additions 58,678 52,027 Business Combinations Derecognition due to disposals or other means (11,427) (6,248) Translation differences 22,577 (9,145) Balance at the end of the period 1,035,380 1,043,662 Accumulated amortisation Balance at the start of the period (498,202) (500,425) Derecognition due to disposals or other means 8,160 4,999 Provisions charged to profit/loss account (35,124) (40,629) Translation differences (15,195) 4,394 Provision for impairment recognised in profit and loss (103) (124) Balance at the end of the period (540,464) (531,785) Net assets Balance at the start of the period 467, ,539 Balance at the end of the period 494, ,877 During the first six months of financial year 2016, Prosegur's investment in property, plant and equipment amounted to EUR 58,678 thousand (as of 30 June 2015: EUR 52,027 thousand). This investment corresponds mainly to acquisitions and fitting out bases and armoured vehicles in Spain, Argentina and Brazil. 18

19 11.2. Investment property Details of movements of property investment for the six-month periods ended on 30 June 2016 and 2015 are as follows: Period ended 30 June Cost Balance at the start of the period 85,051 46,939 Additions - 38,245 Translation differences (12,212) 850 Balance at the end of the period 72,839 86,034 Accumulated amortisation Balance at the start of the period (1,373) (410) Provisions charged to profit/loss account (760) (559) Translation differences Balance at the end of the period (1,904) (961) Net assets Balance at the start of the period 83,678 46,529 Balance at the end of the period 70,935 85,073 During the first six months of financial year 2015, additions to Prosegur's property investment amounted to EUR 38,245. These additions were the acquisition of several floors of a property located in the city of Buenos Aires (Argentina) Goodwill Details of movements in goodwill for the six-month period ended on 30 June 2016 are as follows: Thousands of euros Net amount on books on 31 December ,151 Additions to consolidated group 5,487 Translation differences 15,587 Net amount on books on 30 June ,225 19

20 During the six-month period ended on 30 June 2016, goodwill was incorporated from the following business combinations: Country % ownership Thousands of euros MIV Gestión S.A. (1) Spain 100% 837 Dognaedis Lda. (1) Portugal 100% 1,423 Beagle Watch Armed Response Propietary Limited (1) South Africa 75% 3,156 Procesos Técnicos de Seguridad y Valores SAS (1) Colombia 100% 71 (1) Calculations relating to business combinations are provisional and may be adjusted for up to a year from the acquisition date. 5,487 Note 22 lists the goodwill estimated in the above table. As of 30 June 2016, there are no additional items triggering impairment with regard to recognised goodwill. Details of movements in goodwill for the six-month period ended on 30 June 2015 were as follows: Thousands of euros Net amount on books on 31 December ,219 Additions to consolidated group 1,364 New additions 222 Write offs (3,042) Translation differences (4,724) Net amount on books on 30 June ,039 During the same period, goodwill was incorporated from the following business combinations: Country % ownership Thousands of euros "Call Centre and Back Office" activity line (Spain) 100% 1,128 Nanjing Zhong Dun Security Services (China) 80% 236 1,364 Additions pertained to adjustments to the value of the following goodwill: Thousands of Country euros Transvig-Transporte de Valores e Vigilancia LTDA (Brazil) Derecognitions for the first six months of 2015 for the amount of EUR 3,042 thousand was mainly due to the adjustment made to the value of the goodwill allocated to the business combination of Imperial Dragon Security, Ltd, amounting to EUR 2,717 thousand, after verification of fair value. 20

21 11.4. Other intangible assets Details of movements of intangible assets for the six-month periods ended on 30 June 2016 and 2015 are as follows: Period ended 30 June Cost Balance at the start of the period 491, ,828 Additions 5,136 15,441 Business Combinations 251 1,350 Derecognition due to disposals or other means (1,202) (1,979) Translation differences 41,773 (17,517) Balance at the end of the period 537, ,123 Accumulated amortisation Balance at the start of the period (245,982) (237,555) Derecognition due to disposals or other means 72 1,191 Provisions charged to profit/loss account (19,220) (22,922) Translation differences (19,294) 7,229 Derecognition due to impairment - (14,837) Balance at the end of the period (284,424) (266,894) Net assets Balance at the start of the period 245, ,273 Balance at the end of the period 253, ,229 The additions for the first six months of financial year 2015 included the intangible assets allocated in the valuation of the following business combinations: Customer portfolio Total "Call Centre and Back Office" activity line 1,350 1,350 1,350 1,350 The impairments for the first six months of financial year 2015 corresponded to the intangible assets for the business combination of Imperial Dragon Security, Ltd. The recoverable amount of these assets is determined based on their value in use. These calculations are based on cash flow projections, excluding the effects of potential future improvements in the return on assets, from the four-year financial budgets approved by Management. 21

22 12. Financial assets The breakdown of the available-for-sale financial assets and other current and non-current financial assets on 30 June 2016 and on 31 December 2015 is as follows: 30/06/ /12/2015 Available-for-sale financial assets 3,610 3,775 Deposits and guarantees 3,230 3,564 Other non-current financial assets Total non-current financial assets 7,505 8,324 Other current financial assets 2, a) Available-for-sale financial assets During the first six months of financial year 2016, no purchases, sales, emissions or settlements were made for financial assets maintained for sale. In 2015, Prosegur derecognised its entire investment in the 33% shareholding in the investment vehicle Capitolotre, S.P.A., acquired by the Company on 19 December 2007, as indicated in Note 17 to Prosegur's consolidated annual accounts on 31 December 2015, recognising a loss due to impairment of the amount of EUR 3,027 thousand. (Note 9). On 23 December 2015, the Company has signed an agreement, subject to a condition precedent with Accadiesse S.P.A., whereby the shareholding of Porsegur in Capitolotre, S.P.A., shall be transferred to the company itself, without expecting any consideration from Prosegur. b) Other non-current financial assets On 31 December 2015, this heading includes deposits mainly maturing in Investments accounted for using the equity method Joint arrangements The main Joint Arrangements of Prosegur are those entered into with companies operating in India and South Africa that carry out cash in transit activity. These Joint Arrangements are structured as separate vehicles and Prosegur has a share of their net assets. Consequently, Prosegur has classified these shareholdings as Joint Ventures. 22

23 Details of movements in investment in joint businesses recognised using the equity method for the six-month periods ended on 30 June 2016 and 2015 are as follows: 30/06/ /06/2015 Balance on 1 January 18,328 12,580 New additions 19,890 - Share of profit/loss (1,472) (721) Translation differences 1, Balance on 30 June 38,259 12,569 Details of the main magnitudes of investment recognised using the equity method at year end 2015 are included in Appendix IV to the consolidated annual accounts for the financial year ended on 31 December The recognitions mainly correspond to Prosegur's subscription of shares representing 33.33% of the share capital of the South African company SBV Services Proprietary Limited, making it the largest shareholder. SBV Services Proprietary Limited operates in the cash in transit and cash management sector. This transaction was completd on 25 February The terms of contract for Prosegur subscribing to shares in SBV has a hybrid nature, as it includes an implicit derivative. From February 2019 to February 2021, Prosegur holds an option for its entire shareholding in SBV, with the sole condition that, when it is exercised, Prosegur's total shareholding does not exceed 50% of the share capital. If Prosegur exercises that option, SBV itself will be obliged to repurchase the shares subscribed by Prosegur on 25 February 2016 and, where applicable, the shareholder selling the shares will be obliged to repurchase any shares that it may have subsequently transferred to Prosegur. If SBV is not in a position to purchase the shares subscribed by Prosegur, the other shareholders will be obliged to do so. The sale price will be the same as the price paid for the shares at the time of their purchase, plus market interest. As this implicit derivative cannot be assessed separately and its fair value cannot be reliably determined (either at the time of purchase or subsequently, due mainly to the fact that the option has underlying shares in the purchasing company itself, which is not listed), the hybrid financial instrument shall not be separated and shall be classified jointly as Investment recognised applying the equity method. In addition, the agreements signed for subscribing SBV shares also include an opposite right: a purchase option in favour of SBV under certain circumstances. From February 2016 until February 2019, if there is a serious (unamended) breach by Prosegur of its obligations under the intellectual property rights and technology licence contract signed by the parties, SBV will be entitled to demand that Prosegur transfer (to itself or, where applicable, to the shareholder who sold the shares to Prosegur) all of its shareholding. The purchase price will be the same as for the sales option described above: the price paid for the shares at the time of their purchase, plus market interest increased by a certain margin. In January 2016, Prosegur incorporated a joint venture in India for the activity of alarms, under the name SIS Prosegur Alarms Monitoring and Response Services Pte Ltd. Prosegur has no significant contingent liability commitments in any of the joint ventures accounted for under the equity method. 23

24 14. Cash and cash equivalents Details of this heading on 30 June 2016 and 31 December 2015 is as follows: 30/06/ /12/2015 Cash and banks 225, ,119 Current bank deposits 35,569 49, , ,434 The effective interest rate on current bank deposits was 13.88% (on 31 December 2015: 9.23%) and the average term that deposits were kept during the first six months of 2016 was 54 days (on 31 December 2015: 25 days). 15. Inventory Details of stock on 30 June 2016 and 31 December 2015 are as follows: 30/06/ /12/2015 Work in progress 28,077 30,216 Goods for resale, fuel and other 52,866 32,146 Operating materials 2,225 5,399 Uniforms 8,126 7,294 Stock impairment (5,191) (5,360) 86,103 69,695 No inventories have been pledged as collateral to secure loans. The movement in impairment losses for the six-month periods ended on 30 June 2016 and 30 June 2015 is as follows: 30/06/ /06/2015 Balance on 1 January (5,360) (3,438) Additions (623) (672) Applications and other Translation differences (170) (5) Balance on 30 june (5,191) (4,013) 24

25 16. Equity Share Capital The share capital is made up of: Thousands Number of shares Share capital Share premium Treasury Total stock 1 January ,125 37,027 25,472 (53,493) 9, December ,125 37,027 25,472 (53,493) 9, June ,125 37,027 25,472 (53,315) 9,184 On 30 June 2016, the share capital of Prosegur Compañía de Seguridad, S.A. amounts to EUR 37,027 thousand, divided into 617,124,640 shares with a par value of EUR 0.06 each, fully subscribed and paid up, which are all listed on the Madrid and Barcelona Stock Exchanges and are traded on the Spanish Stock Exchange Interconnection System (electronic trading system) (SIBE) Share premium There is a share premium amounting to EUR 25,472 thousand, freely available, which did not undergo any variation throughout financial year 2015 or in the six-month period ended on 30 June Treasury stock Details of movements in the treasury stock account during the six-month period ended on 30 June 2016 are as follows: Number of shares Thousands of euros Balance on 31 December ,756,890 53,493 Other distributions (62,020) (178) Balance on 30 June ,694,870 53,315 25

26 16.4. Dividends Details of the dividends paid by the parent company during the six-month periods ended on 30 June 2016 and 30 June 2015 are as follows: % of Nominal Period ended on 30 June 2016 Period ended on 30 June 2015 Gross euros per share Amount (thousands of euros) % of Gross euros Nominal per share Amount (thousands of euros) Ordinary shares , ,950 Other shares (no vote, redeemable, etc.) Total dividends paid , ,950 a) Dividends charged to profit/loss , ,950 a) Dividends charged to reserves or issue premium c) Dividends in kind On 15 January 2016, the third payment of the dividend was paid and posted to financial year 2014, amounting to EUR 16,487 thousand (at a rate of EUR gross per share in circulation, equivalent to EUR net per share). On 15 April 2016, the fourth and last payment of the dividend was made and posted to financial year 2014, amounting to EUR 16,487 thousand (the rate of EUR gross per share in circulation, equivalent to EUR net per share). The General Meeting of Shareholders, held on 27 April 2016, approved the distribution of a dividend of EUR per share in circulation on each payment date, which means a total maximum dividend of EUR 68,189 thousand, considering that the capital is divided up into 617,124,640 shares on 30 June % of this sum was paid to the shareholders on 15 July The amount not distributed as a dividend out of the total maximum agreed, due to the treasury shares existing on each payment date, will be for voluntary reserves. Therefore, the payment on 15 July 2016 means a gross amount of EUR per share in circulation and with financial rights on that date, equivalent to a net sum of EUR per share. The remaining payments, until the approved dividend of EUR per share is paid, considering that the capital is divided up into 617,124,640 shares on 30 June 2016, will be paid in the months of October 2016, January 2017 and April

27 16.5. Earnings per share Basic Basic earnings per share are calculated by dividing the profit from the continued activities attributable to the owners of the parent by the weighted average number of ordinary shares outstanding during the year, excluding own shares acquired by the Company. Profit for the year attributable to owners of the parent Weighted average number of ordinary shares outstanding 30/06/ /06/ ,717 77, ,388, ,367,750 Basic earnings per share Diluted Diluted earnings per share are calculated by adjusting the profit for the year attributable to the owners of the parent and the weighted average number of ordinary shares outstanding for all the inherent diluting effects of potential ordinary shares. Profit for the year attributable to owners of the parent (Diluted) weighted average number of ordinary shares outstanding 30/06/ /06/ ,717 77, ,388, ,367,750 Diluted earnings per share Provisions The composition of the balance and details of movements under this heading during the six-month period ended on 30 June 2016 are shown in the following chart: Labour-related risks Legal risk Restructuri ng Employee Benefits (Note 5.2) Accrued obligations to personnel Other risks Balance on 1 January ,274 8,913 3,821 6,439 6,035 77, ,573 Provisions charged to income statement 21,135 6, ,130 13,079 42,623 Reversals credited to income statement (11,829) (5,285) (4,189) (21,303) Applications (9,534) (426) (492) - (988) (1,910) (13,350) Translation differences 10, ,455 21,971 Balance on 30 June ,567 10,114 3,329 6,801 7,177 94, ,514 Non-current ,567 10,114-6,731 5,882 92, ,508 Current , ,295 2,317 7,011 Total 27

28 a) Labour-related risks The provisions for labour-related risks, that amount to EUR 94,567 thousand (31 December 2015: EUR 84,274 thousand), are calculated individually, based on the likelihood of estimated success or failure. In addition, there is an internal review of the likelihoods of reaching agreements for each of the causes depending on the record of experience maintained with Prosegur, from which the final provision to be recognised is concluded. The provision for labour-related risks mainly includes provisions for work-related causes in Brazil. The country's labour legislation means the proceedings take a long time, leading to a provision of EUR 59,139 thousand in 2016 (2015: EUR 48,287 thousand). Additionally, a provision is including amounting to EUR 14,034 thousand (31 December 2015: EUR 14,879 thousand) in relation to the business combination realised in 2005 with Transpev. b) Legal risk The provisions for legal risks, that amount to EUR 10,114 thousand (31 December 2015: EUR 8,913 thousand), correspond mainly to civil lawsuits, which are analysed on a case-by-case basis. The settlement of these provisions is highly probable, but both the value and the time of the final settlement are uncertain and depend upon the outcome of the proceedings that are underway. c) Restructuring The provisions correspond to acquiree Brinks Deutschland GmbH in 2013, which has a restructuring provision recognised that corresponds to estimates for the payment of severances for dismissal and other costs. The settlement of the provision is highly probable. While the moment of settlement is uncertain, it is highly probable that it will take place in the short term. During the first six months of financial year 2016, payments were made to the value of EUR 492 thousand. d) Employee benefits As indicated in Note 5.2 to the consolidated annual accounts for the year ended 31 December 2015, Prosegur has defined benefit plans in Germany, Brazil and France. The actuarial valuation performed by qualified actuaries regarding the value of the benefits promised is updated annually. The latest update took place at year end 2015 and is applicable to the current period. The defined benefit plans in Germany and France consist of retirement and pension plans. Prosegur has a defined benefit plan in Brazil comprising post-employment healthcare offered to employees in Brazil, compliant with local legislation (Law 9656). e) Accrued obligations to personnel These provisions include the accrued incentive, payable in cash, for the 2014 and 2017 Plans. 28

29 During this period, an endowment was made and charged to the profit/loss account for the year, amounting to EUR 2,130 thousand. Said amount includes the fair value adjustment of share prices for the 2014 Plan and the corresponding accrual for the 2017 Plan. EUR 988 thousand were applied in 2016, corresponding to the application of part of the settlement of the 2014 Plan. The fair value of incentives pegged to the share's listed price was estimated on the basis of the listed price of Prosegur shares at the end of the period or at the time of payment. Finally, part of this provision has been classed as current provisions for a value of EUR 1,295 thousand, given the fact that the maturity of this commitment shall take place in financial year 2016 and financial year 2017 (Note 7). f) Other risks Tax risk The provisions for legal risks, that amount to EUR 94,531 thousand (31 December 2015: EUR 77,091 thousand), mainly include tax risks for Brazil and Argentina amounting to EUR 69,748 thousand (31 December 2015: EUR 54,692 thousand). The tax risks associated with Brazil are mainly related to municipal and state claims for indirect taxes, along with provisions from the Nordeste business combination. In Argentina, they are related to diverse insignificant amounts individually related to direct and indirect municipal and provincial taxes. The variation in the provisions for tax risks with regard to 31 December 2015 is mainly due to an increase in the provisions relating to indirect municipal and state taxes in Brazil associated with mainly old tax risks for which the likelihood of happening has been re-evaluated. Prosegur uses the most likely result to measure uncertain tax positions. Significant tax risk is qualified based on opinions of external analysis, according to analysis of jurisprudence regarding the matter in question. In addition, internal analysis is drawn up based on similar cases that occurred in the past at Prosegur or in other companies. At the end of each quarter, each of the tax contingencies are analysed in detail. This analysis refers to the quantification, qualification and level of provision associated with the risk. The respective analysis and assessment by an independent expert are set out in a letter for determining these parameters for the most significant risk at year end. The level of provision is adapted based on this Overtime costs Provisions for the price of overtime are the result of the suit filed against the articles of the State Collective Bargaining Agreement for Security Companies for that set the overtime rates for security guards. Based on its best estimates, Prosegur recognises the provisions for the years that have passed from the start of the Trade Agreement (1 January 2005) to close of business on 30 June The total provision for this item on 30 June 2016 amounts to EUR 3,493 thousand (on 31 December 2015: EUR 3,531 thousand). 29

30 During the six-month period ended on 30 June 2016, payments were made of EUR 38 thousand, corresponding to the agreements made with some of the plaintiff employees (on 30 June 2015: EUR 200 thousand) and income has not been recognised in the profit/loss account for this item (on 30 June 2015: EUR 0 thousand). Comcare Australia In 2016, payments were made for commitments associated with Australia's occupational accident insurance plan amounting to EUR 700 thousand, for a total provision of EUR 4,670 thousand (31 December 2015: EUR 5,002 thousand), of which, EUR 754 thousand mature in the short term (31 December 2015: EUR thousand). 18. Suppliers Below we detail the information required by the Third additional provision of Law 15/2010 of 5 July (amended by the Second final provision of Law 31/2014, of 3 December) drafted in agreement with ICAC [Institute of Account Auditors] Resolution of 29 January 2016, on the information to include in connection with average payment terms to suppliers in commercial transactions. 30/06/2016 Days Average payment period for suppliers 95 Ratio of paid operations 77.0 Ratio of operations pending payment Total payments made 165,324 Total payments pending 15,678 In agreement with ICAC's Resolution, the transactions considered to compute the average payment term of suppliers are commercial transactions relating to the handover of goods or provision of services accrued from the date of entry into force of Law 31/2014 of 3 December. The information on supplier payments refers exclusively to companies located in Spain that are consolidated by the global integration method. Suppliers are defined, for the exclusive purposes of providing information set out in this Resolution as trade payables for debts with suppliers of goods or services, included in the account of suppliers and other payables of the current liabilities on the consolidated balance sheet. Average supplier payment period is understood to be the period from delivery of the goods or provision of the service that are the supplier's responsibility and the payment being made for the operation. 30